U.S. Rep. Ron Paul says prices are increasing and unemployment is continuing to increase

During the first 2012 presidential debate in South Carolina on Thursday, the Texas Republican said the economy will cause President Barack Obama’s re-election efforts to suffer.

"My theory is that people vote from their bellies because it’s whether they’re hungry or not or have jobs and need things, that’s why people vote," Paul said. "And we’re in big trouble. Prices are going up, unemployment is continuing to go up."

We decided to check whether both prices and unemployment are rising.

Let’s start with the former.

Cheryl Abbot, an economist at the U.S. Bureau of Labor Statistics, told us that prices are almost always going up because of inflation — the question is whether prices have been increasing at a faster rate as of late.

And the answer is yes. According to the U.S. Bureau of Labor Statistics’ Consumer Price Index, year-over-year inflation rate has been accelerating since November 2010, when the rate was 1.1 percent. The bureau’s most recent data is from March, when the inflation rate was 2.7 percent.

The price spike is "almost entirely due to gasoline prices," Abbot said. Take gasoline prices out of the picture, and the rate change is nominal, she said.

What about unemployment?

Flash back to January 2008, when the unemployment rate stood at a mere 5 percent. By October 2009, it was 10.1 percent. During most of 2010, unemployment hovered just below 10 percent, peaking in November at 9.8 percent.

But since then, the rate has fallen every month, dropping to 8.8 percent in March.

Until today, that is, when the the bureau reported that unemployment ticked up two-tenths of a point, to 9 percent, in April.

That’s still high by historical standards, Abbot said, but she quibbles with Paul’s claim that unemployment "continues to go up."

So do we. We have no qualms with Paul’s price claim, but unemployment has dropped steadily for four of the last five months. And the labor bureau didn’t report April’s uptick until after Paul made his debate talking point.

Interview with Cheryl Abbot, economist, U.S. Bureau of Labor Statistics, May 6, 2011

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